Few simple answers in the ROI picture

Our In Depth topic for this issue is the tricky matter of Return On Investment, or ROI. It’s an acronym that IT managers have had to become all too familiar with throughout their careers, and especially in this most recent age of computing that has witnessed IT play an increasingly central role in the business decision-making process.

After implementing a very costly piece of technology infrastructure, whether on the recommendation of the CIO or as the result of a successful sales effort from a vendor, business leaders such as a CEO will inevitably be asking, “So just how much money have we saved with this thing?”

For many large-scale implementations, the question has always been extremely difficult, and in some case impossible, to answer. How, for instance, does a company quantify the amount of money saved by running a Business Intelligence application instead of the tried and true method of counting and sorting things by hand?

Measuring ROI on certain investments is considerably easier. A more fuel-efficient fleet of trucks will generate obvious gas savings for a transport company’s executives to see. A bigger arena allows a sports team to sell more tickets.

It’s easy for the executives of such companies to look at the results, smile and give the underling who had the idea to go with the bright new idea a hearty slap on the back and a raise.

For the IT manager charged with implementing a complex piece of equipment that the CEO might not understand in the first place, the situation is starkly different. Positive results are often hard to put into words and numbers.

One key to ensuring the higher-ups are aware of what is really happening is to keep them in the loop as much as possible about what purpose the technology serves, all the while realizing that there might never be any hard figures to show them regarding the technology’s success. If an executive is prepared for such a dearth of information before the infrastructure or system is purchased, it will ease the pain of having to answer his or her demands for results with no numbers in hand.

Another key to ensuring success in the area of ROI is, as our In Depth articles suggest, having a clear business plan into which the IT investment will fit comfortably. Without a roadmap, it is easy to get lost on the road of technology investment.

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Jim Love, Chief Content Officer, IT World Canada

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